The local index increased to 419.08 in August, and is angling towards the all-time high of 427.80 reached in May, 2022. Even if the increases slow the rest of the year, we should get back into record territory by the time the 2024 home-selling season begins.
The San Diego index dropped 11% between May, 2022 and January, 2023, and has risen 11% since!
This was listed for $1,438,000 at the beginning of March, but no takers. They lowered the price to $1,398,000 after two weeks, and then moved down to $1,349,000 a week later (which usually means they weren’t getting any traffic, let alone offers). By the end of May, it still wasn’t sold.
They took the summer off, and relisted with the same agents on September 7th for $1,328,000.
It went pending four days later, and closed for full price.
Be sure to check the listing history on every ‘new’ listing!
How does the current inventory of homes for sale compare to previous counts?
NSDCC Active Inventory, Last Week of October:
2016: 962
2017: 805
2018: 1,000
2019: 909
2020: 590
2021: 277
2022: 399
2023: 371
They say you can’t predict the future, but let’s give it a go.
The NSDCC inventory at the end of next October will be between 300-1,000. Based on higher rates and recent history, there will probably be around 400 houses for sale again.
The rates aren’t going to change. The ultra-low inventory isn’t going to change, especially if potential home sellers hear that the market is “bad” for selling. There will be occasional deals, just like this year but you’ll have to dig them out – they won’t be lying around.
Next year is going to look a lot like this year.
Could there be trouble brewing under the surface?
Are there home sellers scrambling to get out with whatever money they can? Maybe get just enough net proceeds for the family to have a steak dinner at closing? It was like that last time…..but it’s different now.
It’s a lot different now!
Let’s check the home sellers who purchased during the pandemic days. Those who bought their home before 2020 are having no problem selling for substantially more than they paid, so we only need to check the recent purchasers. Is anyone losing their shirt?
This month’s NSDCC sales are up to 117 – here are the ones that were purchased since 2020, and comparing what they paid then to their sales price this month:
Observations:
Could there be trouble ahead for those who bought this year if prices declined substantially? Maybe, but rates have been rising for 18 months so they shouldn’t be surprised about future market shifts – if any.
For them to purchase a home in spite of market conditions must mean they are in it for the long haul.
P.S. The flip that made $8,000,000: Click here
As the local real estate market continues to defy the expectations of most observers, it’s natural to wonder, ‘who are these buyers?’ Here is one story:
They paid $2,250,000 cash on June 1st, which was $55,000 over the list price. Here is the listing:
https://www.compass.com/app/listing/1833-california-street-oceanside-ca-92054/1288534331496481801
Here are the two Top 10 lists for the best cities in America! You’ll be surprised to see which city took the top spot!
Several years ago, travelers headed to San Diego might have wondered what they would do in the city, besides hitting the beaches. No longer. With a recent string of hot hotel openings (like the Guild and the Carté) and a legit food scene that offers up some of the best Mexican dishes and seafood platters you’ll ever taste, San Diego has officially stepped out from the shadow of its big sister to the north, earning world-class destination status that goes well beyond the waves. Come for the sunshine, but stay for everything else.
Paying referral fees is a standard practice in the realtor business.
Are you thinking of moving to a new town and need an introduction to a realtor there? Your agent here will track one down for you, and that agent will pay them a referral fee, which used to be 20% to 25% of the gross commission. The challenge? Getting good help!
Great agents don’t need any assistance with procuring new clients, and they might reluctantly pay a 20% or 25% referral fee only if the new client is motivated and in the upper regions, price-wise.
Less-experienced agents are willing to pay out higher referral fees, which doesn’t do the client any favors.
What we do is tough work, and fewer and fewer people want to do it.
It’s so hard to hire, train, and retain good/great agents now that many real estate companies are just resorting to referring clients, and taking a substantial referral fee instead.
Zillow has staff taking the incoming calls, and qualifying the leads before sending them to their Flex agents. Their referral fee is now 40% of the gross commission, AND they want buyers to use Zillow Home Loans too. Their Flex agents who send their buyers to ZHL will be rewarded with more leads, and vice versa:
Less than five percent of the U.S. real estate agent population works with Zillow (with far fewer Flex agents), and Zillow only touches around three percent of U.S. real estate transactions. They are running a small, exclusive ecosystem of agents that are willing to play by their rules, which now includes tight integration with Zillow Home Loans.
You’ve probably seen the TV ads by Homelight? The ones that pitch teaming you up with the best agents in town? Well, at least with the best agents who are willing to pay them a 30% cut of the gross commission.
Now Redfin is giving up on their agent-employee program, and they are testing the idea of hiring agents on commission splits, instead of salary and paying them “up to 75%”. It’s doubtful they will pay many of their agents the full 75% split. It’s just another way for them to get referral fees of 30% to 50%.
None of the referral fees are disclosed to the client, and it’s never discussed of how the size of the fee will impact the quality of the agent service you receive.
But most of all, any thought of commissions dropping will be fleeting at best. Commissions need to stay high in order to pay the larger referral fees!
Below is a graphic from a USD publication that shows how many people might do something about high cost of housing here. Unfortunately, the majority of people polled probably weren’t the long-time homeowners who find it quite comfortable here and wouldn’t consider moving even if you gave them a couple of million dollars:
Many San Diegans are questioning if they can remain in San Diego County due to the lack affordable housing, inflation, and the related high cost of living. The housing crisis is forcing residents – including those who work in the nonprofit sector – to rethink staying in San Diego. Likewise, the high cost of living is increasing demand for nonprofit services as the need for basic support services grows. Inflation is driving upward pressure on wages while depressing the value of charitable gifts and assets, threatening the financial stability and strength of the nonprofit workforce.
https://digital.sandiego.edu/cgi/viewcontent.cgi?article=1019&context=npi-stateofnp
This is our fifth year of participating with Mama’s Kitchen in their annual fund-raiser, Mama’s Pies!
This is their 19th Annual Thanksgiving Bake Sale, where local bakeries and restaurants donate pies for pickup on Wednesday, November 22. Each pie sold will provide 12 meals to a critically ill San Diegan.
They are literally the best pies I’ve ever had!
Last year they sold out early, so make sure to get your order in before they’re gone!
If you’re interested in participating in Mama’s Pies, here’s everything you need to know!
1. Visit our selling page here.
2. Click “Buy or Donate Pies.”
3. Add your desired pies and holiday feasts to the cart.
4. Under “Select a Seller” section, click “Yes” and choose “Team: Klinge Realty Group.”
5. Choose your desired pick up location OR under Private, choose “KLINGE” to have me deliver it to you. If choosing delivery, we’ll reach out to you for your address.
6. Add in any additional donation amount if you choose to do so.
7. Put in your payment method and click submit!
Thank you in advance for supporting this important work – we couldn’t do it without you!
There have already been 101 detached-home sales close this month between La Jolla and Carlsbad!
With five business days left in the month, plus the late-reporters, it means we should match last October’s count of 133, and maybe even approach last month’s 153 sales.
Of this month’s 101 sales, 45 were all-cash.
The 8% mortgages won’t kill the market – especially for the superior homes for sale, which are hot. They may be the only ones selling, unless sellers of the inferior homes will accept an appropriate discount – a gap which is probably 10% to 20%.
